Start a Business in Cambridge, MA: When it comes to starting a business, entrepreneurs must look for the place with the most potential. Whether a corporation, sole proprietorship, partnership, or LLC, having a business in Cambridge, MA, is a plus for any entrepreneur. In general, setting up any form of business in Massachusetts, US, is the initial step to building an international brand.
Entrepreneurs across the globe are interested in starting and expanding their businesses in Cambridge, MA. With an urban population of 117822 (estimate), the city has a lot to offer to all emerging entrepreneurs. The main reason for this is the economic environment and flexibility of the business structure in Massachusetts. Like most places in the US, Cambridge, MA also offers business structures for all types of entrepreneurs; no matter what business you want to do, there’s a perfect solution for you. If you want to start limited liability company (LLC) or a corporation, or a sole proprietorship, Cambridge, MA has a proper business environment for all.
In this article, you will read about how to start a business in Cambridge and why you should choose Cambridge to start and run your business. We recommend you check below the important facts about Cambridge, MA; these might help you.
On this page, you’ll learn about the following:
- Cambridge, MA Household Income Statistics
- Cambridge, MA Education & Labor force Facts
- Cambridge, MA Demographics
- How to Start a Business in Cambridge, MA
- Other Things to do After Starting Your Business
- Important Cambridge Stats for Starting a Business
- Reasons to Start a Business in Cambridge
- FAQ About Cambridge, MA
Cambridge, MA Household Income Statistics
| Cambridge Median household income | 107490 USD |
| Cambridge households with dual income earners | 63.1 % |
| Cambridge households $150K+ Income | 34.8 % |
| Cambridge households $100K+ Income | 52.9 % |
| Cambridge households $100-150K Income | 18.1 % |
| Cambridge households $75-100K+ Income | 10.8 % |
| Cambridge households $50-75K+ Income | 10.8 % |
| Cambridge households $35-50K+ Income | 7.2 % |
| Cambridge households $25-35K+ Income | 4.3 % |
Cambridge, MA Education & Labor force Facts
| Cambridge residents with a bachelor’s degree (or equivalent) | 29.5 % |
| Cambridge residents with at least a 4-year degree | 79.1 % |
| Cambridge residents with a graduate degree | 49.6 % |
| Cambridge residents with a high school diploma but no more | 6.8 % |
| Cambridge residents with less than high school education | 4.5 % |
| Cambridge residents with some college but no more | 9.7 % |
| Cambridge residents with a Bachelor’s degree or higher (STEM fields) | 63.2 % |
| Cambridge households that own (rather than rent) their residence | 34.9 % |
| Cambridge residents 16 and older in the labor force | 69.5 % |
| Cambridge residents unemployed | 4 % |
Cambridge, MA Demographics
| Cambridge residents aged 0-9 | 7.7 % |
| Cambridge residents aged 10-19 | 10.9 % |
| Cambridge residents aged 20-29 | 29.7 % |
| Cambridge residents aged 30-39 | 20 % |
| Cambridge residents aged 40-49 | 9 % |
| Cambridge residents aged 50-59 | 7.4 % |
| Cambridge residents aged 60-69 | 7.6 % |
| Cambridge residents aged 70-79 | 5 % |
| Cambridge residents aged over 80 | 2.7 % |
| The average size of resident families in Cambridge, MA | 2.82 |
| Estimated population per square kilometer in Cambridge, MA | 7115 |
| Cambridge, MA urban population (estimate) | 117822 |
| Cambridge, MA municipal population (estimate) | 117822 |
Now that you know what makes Cambridge of Massachusetts good for business, let’s get started with the exact steps on how to start a business in Cambridge.
How to Start a Business in Cambridge, MA
Starting a business in Cambridge, MA, needs planning, financial decisions, legal procedures, and a handful of other things. Be it a corporation, sole proprietorship, partnership, or LLC in Massachusetts, you must go through the following steps. These steps are general steps. They are subject to change depending on the structure of your business.Generally, starting a Limited Liability Company is easy to form. Read our guide on how to start an LLC before you start your own business. Here are the steps to set up your business in Cambridge.
Step 0: Decide on What Business to Start
This is the first thing you work on, the type of business you want to start in Cambridge. Depending on that, you need to make your business plan. Apart from the legal documentation and process, you must include the following points in your business plan,
- Through market research on demand trend
- Complete Budget plan – funding your business. If you’re planning to start an LLC, then take a look at the cost of LLC
- What competitors are doing
- SWOT Analysis – check what your Strengths, Weaknesses, Opportunities, and Threats are
- Your targeted buyers
Once you have the entire plan with you, you can continue working on the legal structure of your business. LLCBuddy will guide you through the legal process of forming an LLC for your business. It’s very likely that you have already done this step 0, so that we won’t go deep into this step, let’s move to step 1.
Step 1: Choose Your Business Structure
The very first step after you decide on what type of business you want to start is to choose what type of business structure you want to form. You can form an LLC, a sole proprietorship, a corporation, or a partnership. Each type of structure has different rules and regulations. For example, if you want to start a Massachusetts LLC, there are different types of tax and fee structures. An LLC formation is similar to forming a sole proprietorship. On the other hand, forming a corporation is much more complicated. The tax and fee structure is completely different in corporation formation.
Step 2: Name Your Business
The next step in forming a business is to give it an appropriate name. Having a business name is not so easy task. You cannot pick a random name for your company. One has to follow proper naming guidelines before they name their company. Besides, before you settle a name, you must check if the name you are looking for is available to use. You can visit the official government site of Massachusetts to do the Massachusetts LLC name search before you pick the available name. Below are some of the naming rules you need to follow,
- You cannot name your business that has words or phrases like Bank, University, Government, or anything that can confuse people with a government sector.
- If you are forming an LLC in Massachusetts, then you must include words like “LLC,” “LC,” “LLC,” “Liability Company,” and “L.L.C.” If it is an LLP, then you must include “LLP” in your business name.
- The name should reflect the nature of your business. Any name that can confuse people should not be picked.
- You can check if the name of your company is available. Through the business name search process, you can search if the desired name is available for use or not.
- You can reserve your business name for a certain time before you form your business in Cambridge, MA by filing a name reservation application.
The above-mentioned points are basic naming rules that all businesses have to follow while naming their company. As mentioned above, these rules are subjected to change depending on the structure of the business.
Step 3: Get a Registered Agent
A Registered Agent is a person who receives all types of legal and official documents on behalf of the business. Whether a suit against your company or formation-related documents from the state, a Massachusetts LLC Registered Agent is responsible for receiving these documents at his/her official address. In general, anyone who has the right to conduct business in Cambridge can be a registered agent. However, there are some requirements to becoming a registered agent.
- The person has to be 18+ years of age.
- Must be a citizen of the Massachusetts
- Must have a physical street address in the Massachusetts
- Must have legal rights to conduct business in the Massachusetts
Anyone who fulfills the requirements can be a registered agent. Also, anyone from the company, your spouse, any relative, or yourself can be a registered agent. But, it is recommended that you hire a professional registered agent to look after your documentation. You can choose from the best LLC services that also offer registered agent for LLCs.
Step 4: Register Your Business
The next step is to register your business under the Secretary of State, Massachusetts. The Articles of Organization (or certificate of incorporation) of your company should be submitted online, by mail, in person, or by fax to the Massachusetts SOS. You need to pay the state filing fee either by Credit Card or by check to the SOS while registering your business in the Cambridge, MA. Your Massachusetts LLC certificate of formation should have the following details about your business
- Company/Business name, address
- Registered Agent Name, address
- Member-managed or manager-managed (in case of LLC)
- Type of business
Depending on the type of business structure, you may have to add some more information to the formation document.
Step 5: Write the Operating Agreement
An operating agreement is a document that has all the structural information of your business. In most states, it is not mandatory to create an operating agreement. However, it is highly recommended to have one as an internal document. This document records information such as,
- About Business
- Members and management
- Capital contribution
- Profit Distribution
- Change of membership
- Dissolution
In future, if any member wants to leave the company or you want to dissolve the business, then the Massachusetts operating agreement has everything recorded, from clauses to contributions.
Step 6: Obtain EIN
EIN or Employer Identification Number is required to file taxes, open a business bank account, and if your business has employees. EIN can be obtained from IRS. It is a 9-digit number similar to Social Security Number. However, EIN is different from SSN. It is solely used for business purposes, especially for general tax filing. You have to fill out the form and submit it to the IRS website. It does not cost you anything to obtain EIN.
Step 7: Get Business Bank Accounts
Once you obtain the EIN for your business, you are free to open a business account in the US. Having a US business bank account can ease your business transactions in Cambridge, MA. It increases your business credibility and liquidity. It will also be helpful for business loans.
Step 8: Create Your Business Website
Business websites are as important as your business structure. It is necessary to have a catchy business website with all the information regarding your company. Along with the website, you need some more things. Things such as logos, business cards, business emails, domain names, and social media accounts are needed to promote your business. You can hire a professional business service to get all of these services under one roof.
Other Things to do After Starting Your Business
- Once your company is set in the Cambridge, Massachusetts, you need to file your taxes and apply for licenses (if needed).
- Apart from the license and permits, you need to get insurance for your business. Such as General Liability Insurance, Professional Liability Insurance, and Workers’ Compensation Insurance are some of the insurances you need to get if you are about to start an LLC.
Important Cambridge Stats for Starting a Business
Before you start a business in Cambridge, it is required that you know some facts about the city. Following are some of the stats to consider before starting a business.
Education & Employment
Cambridge has a diverse population that comes from various educational backgrounds. There are students who haven’t finished their high-school education, whereas there are people who are more than just college graduates. Check the table (Education & Labor Force) for detailed data. From the data, it is clear that the city has enough educated and skilled people who can contribute to the labor force.
Demography
As we talk about the urban population density, the young population percentage in the city is approximately 29.7 (people in their 20s) and 20 (people in their 30s). This means that having any business that is new and tech-based might be profitable. The median age of the population in the city is 30.6. On the contrary, if anyone wants to start a business that is related to any old-age service, such as caregiver, primary old-age support, or something of a similar sort, then Cambridge has approximately 2.7 (people in their 80s and above) percent of old people. Check out the table (Demography) above for more information.
Real Estate
Another important factor to mention about Cambridge is the home value of owned properties. The average value of owned houses is 842521. Also, the percentage of people living in their own houses is 34.9. This reflects the real estate market of the city. For a metropolitan city, this is a considerable number.
Health
It is inevitable that living in a big city is different from living in a town or a comparatively smaller city. It directly affects lifestyle and health. It is obvious that having health insurance is important, no matter which city or region you are residing in. But there are people in Cambridge who still do not have health insurance. The rate of people not having health insurance is 2.3. This depicts the lifestyle and overall health demography of Cambridge. As you plan to start your business in this city, you must consider this stat as well.
Income & Lifestyle
The income pattern of the people in this city is given in the table (Income) above. In Cambridge, a part of the population has a dual family income that reflects a better standard of living. As in, people have more than one source of income. The table above shows the income percentage of various slabs.
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Reasons to Start a Business in Cambridge
Cambridge offers a bunch of business-friendly services for entrepreneurs. A proper business environment, skilled labor, tax advances, deductions, and much more are awaiting if you are interested in starting your business in Cambridge. Here are some of the reasons,
Stable Economic Growth
Cambridge or any other city in Massachusetts has stable economic growth and an environment that helps any business to grow successfully. The economic structure of Massachusetts shows not only balanced but also a sustainable condition of economic growth, which in turn triggers the businesses to flourish in the state.
Minimize Personal Liabilities of the Entrepreneur
If you’re considering starting an LLC in Cambridge, then it will be your best choice. An LLC protects your personal assets and minimizes your personal liabilities. This is one of the many reasons why having an LLC in Cambridge is a wise choice. Also, if you are opting for an LLC, the tax deductions will be more than having a corporation.
Federal and State Tax Relaxation
There is a series of federal taxes that an entrepreneur has to pay when operating a business in the US. Depending on the state your company is located in, the state taxes are being imposed. For an LLC, both of these taxes are much lower compared to other business structures. Along with tax impositions, some tax deductions (state-wise) lower the filing fees and other government charges. Check out the Massachusetts LLC tax structure to know more about the tax structures for LLCs in the state.
Government Incentives for Entrepreneurs
Federal and state governments in the US ensure that entrepreneurs get a proper business environment in the state or city they are operating their business. The government provides a few incentives to the business holders in Massachusetts or any other state. That means if you are operating any business in Cambridge, then Massachusetts State will provide an incentive for creating jobs, contributing to the state’s GDP, and/or balancing the state’s tax structure.
Low Corporate and Other Business Taxes
Corporations and other business structures (except for an LLC) are liable to pay a corporate tax in Massachusetts. Also, there is a Sales Tax that all businesses, including LLCs, have to pay. However, the rate of taxes is very low. Besides, as the businesses receive incentives, the tax burden gets lower.
Skilled Labour & Quality Manpower
In Cambridge, it is easy to hire employees for your business. They are not only skilled but also well-educated to help your business grow. As mentioned above, the 69.5 is the percentage of labour participation. Hence, it is clear that having a business in Cambridge will make a lot of difference to the existing labor force.
Demand for New Market and Industry
In Cambridge, Massachusetts, there is an uprising demand for new industries and new markets. Entrepreneurs who are willing to start a business in any of the cities of any state are given enough opportunities to stay in business. Business licensing, tax deductions, incentives, and relaxation of business taxes are some of the benefits that encourage start-ups and budding entrepreneurs to start their own businesses in Cambridge.
If we follow the US Data, the median value of commute time for the residents to their work is approximately 26.5. If you are starting a business here, you must keep in mind that commutation can be a point to consider.
Intellectual Property Protection
The US government receives roughly more than 1 million applications for IPR every year. The federal government makes sure that there is no infringement of any patent or property rights. It does not matter which city in which state you are running your business. The rule of Intellectual Property Protection is the same for all. If you have a foreign business in the US, then you might get more benefits under the IPR act.
Other Benefits
Cambridge (aka ) is ranked at 2 in terms of importance. Apart from the above mentioned reasons, there are some other benefits that businesses enjoy in Cambridge. For example, technological advancement, a stable political environment, renewable resources, sustainable non-renewable resources, and some more benefits make things easier for entrepreneurs to start and run their businesses. According to US Data, the percentage of young people in Cambridge is 20. Hence, it would be great to start a business that is related to tech here as you might get a good number of clients.
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When Should You Start Business In Cambridge Massachusetts
Whether you’re a first time entrepreneur or you’re looking to grow your existing business, starting a business in Cambridge Massachusetts can be a rewarding experience. The city is home to many world class educational institutions, making it an ideal place to start your entrepreneurial journey. In fact, the city is home to a host of startups and innovations.
For example, the city boasts several startup accelerators, including MIT-led The Engine. These accelerators offer a variety of opportunities for businesses to test their ideas and pique the interest of investors. One of the best parts about starting a business in Cambridge is that the city’s small-town feel is preserved. The city’s local government offices can be a huge help in getting your business off the ground, and are a great place to start if you’re looking to grow your business.
When you’re looking to start a business, you need to do your homework. For example, the best location for your new venture is going to depend on your target market and the type of industry you plan to enter. It is also important to consider the demographics of the area. For example, if you’re looking to start a restaurant, it’s likely that your business will draw visitors from nearby neighborhoods, so you’ll need to figure out how many people will be eating in your establishment.
Other considerations include finding the right type of insurance. For example, you’ll want to make sure your homeowner’s insurance will cover any damage your establishment may cause to a customer’s property. If you’re a cab driver, you’ll need to get a Hackney License. You can also make use of the internet to find insurance companies that specialize in small business insurance.
The best way to go about getting started is to develop a comprehensive business plan. This document should include an estimate of how much money you’ll need to operate your business for at least the first year. If you’re lucky, you’ll also get some professional advice along the way.
The small-town feel of the Cambridge city offices is a boon for new businesses. They’re not only friendly to small businesses, but they are also equipped with resources that can help you navigate the state’s regulations and get your business off the ground. Getting the right type of insurance for your business isn’t always as simple as it sounds, so be sure to speak with a professional.
The best way to figure out when you should start a business in Cambridge Massachusetts is to determine your business objectives and goals. You may want to think about how much capital you’ll need to launch your business, and how many employees you’ll need. Depending on your budget and your industry, you may want to seek help from a financial advisor to help you determine your business’ needs.
The city’s business department offers support to small businesses through grants, training, and other resources. For example, a business could take advantage of the free business training offered by the Massachusetts Department of Economic Development. The city’s business directory is a resourceful way to find information about businesses in the area. Likewise, the Cambridge Chamber of Commerce is a resourceful organization that helps local businesses connect with each other.
FAQ About Cambridge, MA
In Cambridge, MA, food trucks, coffee shops, modest real estate, and internet enterprises are the small businesses that generate the most profits. If you are in Cambridge and want to start a small business, then you can consider these businesses to make some good money in Cambridge.
If an LLC in Cambridge, MA is not making any money, they may not have to pay taxes. LLCs are exempt from filing income tax returns as a company in Massachusetts.
Cambridge, MA is a city that’s full of life and culture. It has a booming economy, a low cost of living, and a thriving economy. The city is also well-known for its green initiatives and is home to many environmentally-friendly companies. Cambridge is a great place to start a business.
Yes, you need insurance for your LLC in Cambridge, MA. If your LLC employs people, you are required by federal law to have workers’ compensation. Though certain states have distinct laws. To find out whether insurance is required in Massachusetts for LLCs or not, visit the Massachusetts Secretary of State website.
LLC in Cambridge, MA is required to pay a certain amount in taxes each year. You must pay sales tax, franchise tax (not in all states), and employment tax if your LLC has workers. However, Cambridge, MA does not impose an income tax on LLCs.
How much will it cost to license a company in Cambridge, MA, if you want to create one there? The price to license a company in Cambridge, MA varies depending on the kind of enterprise you intend to launch.
A sort of company organization called an LLC exists in Cambridge, MA, and it combines elements of both partnerships and sole proprietorships. Despite the fact that pass-through taxes exists, LLCs do not have double taxation. In turn, this allows consumers to save a lot of money.
There are many factors to consider when deciding whether to rent or buy a property in Cambridge, MA. The most important thing to consider is the cost of both. If you’ve to start a business, it’s best to research the market and talk to the agent before making a decision.
Today, unicorns are widespread across the world. Of course, Cambridge, MA is not an exception in this case. Cambridge, MA is home to a few unicorns. Some unicorns are highly well-liked in Cambridge.
Choosing the right sort of LLC to form is the first step if you want to create an LLC on your own in Cambridge, MA. The Formation paperwork must be submitted to the Secretary of State if you wish to create a single-member LLC.
You must complete the online SS-4 for an EIN number form in order to get an EIN number in Cambridge, MA. You may print out the application when you’ve finished it and send it to the IRS. If the IRS has any more questions after receiving your application, they will get in touch with you.
Each LLC must choose a registered agent in Cambridge, MA. An expert, a member of the LLC, or a family member might be involved. On behalf of the LLC, this individual is in charge of picking up all the paperwork at their Cambridge office.
Consider working as a freelance writer if you’re seeking for a method to earn money in Cambridge, MA. There are various methods to earn money as a freelance writer in Cambridge, MA, but you can also do it from home and choose your own hours.
If you want to run a business in Cambridge, MA, get a good business plan. Once you have it, you can choose a suitable business name, hire a registered agent, and file your business with MA Secretary of State. After filing, make sure to get a proper license and permits.
The cost of starting your own business in Cambridge, MA, will depend on the type of business. If you want to start a business as an LLC, you will need to pay a fee. In addition, you will need to get a business license and a tax ID number.
The duration of an LLC’s life in Cambridge, MA is determined by how long the business is in existence. The LLC will likewise end if the firm does. You must timely renew the LLC in Cambridge, MA to keep it active.
Selling your goods or services is a simple way to earn cash if you have a Cambridge, MA, LLC registered. Locate prospective buyers and advertise your LLC to attract additional customers from throughout the state or the nation.
Cambridge, MA is growing fast in terms of economic growth. This is happening because of the industries and startups the city has. Their contribution to the economy is immense in Cambridge. More businesses are coming to the city. Hence, it is growing fast compared to other cities.
There are a lot of factors that go into how much it costs to create an LLC in Cambridge, MA. It can depend on the number of members, the type of entity, and annual fees. The average cost for an LLC in Cambridge, MA is $500.
Most companies need all of your attention and work. If you own your own company, it won’t run itself, whether it’s in Cambridge, MA, or any other city in the state. You could gain time for yourself if you launch your firm with a lower volume.
A Cambridge, MA LLC offers many benefits, but it also has drawbacks. First, LLC owners are responsible for paying both income tax and self-employment tax. Second, certain states dissolve an LLC when one of its members passes away. Furthermore, LLCs are more complicated than sole proprietorships.
Cambridge, MA, is an excellent area to go if you’re seeking for a spot to launch a business. Startups have access to a wealth of resources, not to mention tax advantages. For business owners, there are a number of excellent networking chances.
It costs $65 to register a DBA in Cambridge, MA. To reserve their company name before launching their operations, LLCs must pay this sum to the Massachusetts Secretary of State.
The fast food industry is an excellent choice if you’re looking to launch the simplest company in Cambridge, MA. Burgers, waffles, rolls, wraps, and other foods may be sold from a kiosk or, better yet, a truck. Anyone may start this company with ease.
Some popular businesses like restaurants, hotel businesses, designer apparel businesses, and so on continue to move into Cambridge, MA. The likelihood of having major brands in Cambridge is increasing along with the economy.
Selling your product in Cambridge, MA can be a good option if your product is in demand. Make sure you have the following before trying to sell your product: 1. A solid sales strategy; 2. An understanding of your rivals; 3. A grasp of prospective customers; and 4. Product marketing.
Determining a registered agent is necessary for an LLC in Cambridge, MA. A registered agent is required to accept any correspondence on your behalf, including official and legal papers. A registered agent for your LLC in Cambridge, MA, must be appointed as a result.
If you want to make money faster in Cambridge, MA, then choose a business that is popular and in demand. Enterprises in Cambridge, MA that may expand more quickly than others include food businesses, dog trainers, and personal trainers.
Compared to Houston, Massachusetts, Cambridge is a less expensive place to live. Living in Cambridge is more economical because of the city’s reduced cost of living. In terms of a commercial standpoint, though, some people could find Houston more cheap. According to the person, it is quite relative.
In Cambridge, MA, a living wage is roughly $65,000. Cambridge would consider any salary between $40,000 and $60,000 to be livable. You may need to make more money if you wish to live a luxurious lifestyle in this city.
Register your company name with the Secretary of State to preserve it in Cambridge, MA. You will then have the legal right to sue any other company that uses your company name improperly. The Secretary of State also allows you to register brand names and product names.
Cambridge, MA is a city that is filled with small businesses. It has been ranked as one of the popular cities in the United States for small businesses. There are over 10,000 small businesses in the city, and the number is increasing.
Cambridge, MA is a city where many enterprises are open to moving. Businesses are relocating to Cambridge for a number of reasons, including its robust economy, friendly business climate, and state tax structure. Additionally, there are several business opportunities in the city.
Starting a small business in Cambridge, MA is a great way to make a living. There are many benefits to starting a small business in Cambridge, MA. For example, the cost of starting a small business is quite low. It costs $500 to file an LLC in Cambridge, MA.
In Cambridge, MA, the tax burden depends on the type of business structure you have. For example, if you have an LLC, you might have to pay a sales tax, franchise tax, and employment tax (if needed). On the other hand, corporations have to pay business income taxes.
In Conclusion
Starting a business in Cambridge is not only easy but also profitable. A large portion of the US and even people from other countries are registering their business in the US for intercontinental brand building. Besides, Massachusetts has a sustainable economic atmosphere that is enough to encourage newbies to start and run their businesses in Cambridge, MA.